Bitcoin 2.0: Revolution resumed

Patrick L Young is CEO of niche crowdfunding platform HanzaTrade and an advisor to fund managers throughout the world. Born in Ireland, he is an active investor in the “New Europe” amongst other emerging markets and is an active Co Founder of grassroots startup group "Mission ToRun."
Home Page: http://patricklyoung.net Twitter: @FrontierFinance

Ignore the doomsters: the cryptocurrency revolution is in rude health. Widespread adoption remains a likely outcome.

As 2015 dawns, the bureaucratic blob at the heart of many
multinational business entities is feeling smug. Bitcoin, barely
above $300, appears a shadow of its one-time booming self. The
lure of the million-dollar bitcoin and beyond has become
unthinkable as the emerging currency is still recovering from its
first bubble.

Once again rumors of the death of cryptocurrency will prove
unfounded. In an era where politicians and management consultants
alike spout an obsession with ‘innovation,’ alas they tend to
turn skeptical as soon as a genuinely new way of doing anything
is staring them in the face! With so many analogue legacy
stakeholders eager to continue exploiting the currency status
quo, unsurprisingly the arrival of a genuinely revolutionary
upheaval in money is viewed with suspicion amongst those with so
much to lose. Bankers (both central and ‘commercial’),
politicians and large corporations tend to regard Bitcoin as a
nasty inconvenience to their self-interested pork barrel approach
to prosperity.

The problem for legacy players is that price is only one aspect
of the complex bitcoin equation. Besides, the big business/big
government nexus is poor at process innovation - as those who
watched them endeavor to ignore or belittle the initial rise of
the internet itself can readily attest.

Economic life regularly involves cycles. Bitcoin burst forth into
its first major upswing fueled by colossal excitement which led
to a price squeeze while the currency was still an infant. QV the
internet: the dotcom bubble of 2000AD took place when there was
little clear evidence of how significant the web would become a
decade or so later.

2014 witnessed incredible development in cryptocurrency which
deserves examination beyond simply passing judgment on the core
value of bitcoin. Throughout the past year, financial technology
innovators have been increasingly investing time and dollars into
all manner of ‘fintech’ projects moving cryptocurrency to the
next level.

Bitcoin has already made considerably more progress than previous
electronic currency projects, thanks to the relatively broad
adoption of its basic infrastructure. That virtuous circle of
adoption continues. During its first four years, bitcoin spawned
the financial equivalent of sealed asphalt roads, garages and
petrol stations akin to the pioneering era of the automobile.
Like the Ford Model T, which ignited the boom for roads and
roadside services, bitcoin is the equivalent cryptocurrency
trailblazer. By comparison, legacy banking looks like a horse and
cart solution.

Meanwhile, at the heart of the cryptocurrency revolution sits the
‘blockchain’. Pure digital genius: at once public but also
private while ensuring bitcoin remains decentralized (unlike your
everyday fiat money). Massive investment poured into the core
technology of bitcoin during 2014.

It’s not just money either. A cornucopia of prodigiously awesome
brains are eagerly building all manner of new ways to deploy the
blockchain and devise a whole new way of not merely thinking
about money, but actually a whole new money system itself.

Which brings us back to those who will write a bitcoin obituary
at the drop of a hat. They are on the wrong side of history
retaining their analogue approach to cash. The new bitcoin era of
money is great news for savers who have been arbitrarily
impoverished in a world where debt is king (but not for long).

Governments must find a way to fund their ever greater demand for
cash to fund their unsustainable promises and spineless inability
to say no to any major client group. Likewise the banking blob is
terrified by anything which could break up the cozy QE cartel
which has done nothing to make the world a better, fairer place
and everything to suggest that the world’s nuttiest conspiracy
theorists just might be right (well, apart from the lizards - I
never got that bit no matter what I imbibed). Anyway, a smoother,
faster means of payment not subject to arbitrary devaluation
still looks like a winner.

Bitcoin is not merely alive and kicking, it is rapidly becoming
the hydra of money. Every attempt to decapitate the currency
merely causes decentralized ‘cryptocash’ to grow two more limbs
in response. Last year I referred to The Year of Bitcoin, but 2015 will be fascinating.

Growing disillusion with fiat money as manipulated by a QE
addicted central banker near you will help propel the next stage
of the cryptocurrency revolution.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.